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National Coalition Calls on FHLBank Presidents to Prioritize Affordable Housing Investments

Washington, D.C. – In a letter published today, the Coalition for Federal Home Loan Bank Reform (CFR) called on the eleven FHLBank presidents to dedicate more of their efforts and money to supporting affordable housing programs (AHP). The letter reinforces Treasury Secretary Janet Yellen’s recent statement urging the FHLBank System to increase its financial contributions to support fair and affordable housing, particularly focusing on boosting the housing supply. Secretary Yellen’s comments are the latest in a growing chorus of voices calling for the FHLBanks to do more to address the nation’s affordable housing crisis. The Biden Administration, the Federal Housing Finance Agency (FHFA), Senator Catherine Cortez Masto, and Senator Elizabeth Warren have also publicly requested that the Banks increase their AHP contributions.

The FHLBank System has the potential to have a major impact on increasing the supply of affordable housing and supporting CDFIs as it receives billions of dollars in government subsidies each year. However, the System’s AHP contributions remain incredibly small compared to the record-breaking levels of income and dividends. Last year, the Banks proudly announced they would increase their voluntary commitment by five percent. Their balance sheets show that they fell quite short of even this modest goal, only spending 2.5 percent of their net income on voluntary AHP contributions last year, and contributing less than 3 percent in the first quarter of 2024.

The Coalition’s letter highlights how the FHLBanks are uniquely positioned to help the millions of U.S. families struggling to afford housing.

“To combat the housing affordability crisis, Federal Home Loan Banks must increase their mission-oriented lending to support fair and affordable housing,” said Michael Calhoun, President of the Center for Responsible Lending. “Too many FHLB system member institutions don’t issue a single mortgage, and don’t invest enough to increase the supply of housing in their communities. It’s time to fix that.”

Sharon Cornelissen, Director of Housing at Consumer Federation of America, said: “FHLBanks celebrate their contributions to affordable housing, yet with their billions in profits and dividends, these government-sponsored enterprises do the bare minimum. Despite promises, they haven’t even achieved the voluntary 5 percent contribution in the last two years.”

“Given the record homelessness and unprecedented housing affordability crisis, it is unacceptable for the FHLBank System to continue to put maximizing profits and dividends to its members ahead of fulfilling its public mission to support housing finance and community development,” said Caroline Nagy, Senior Policy Counsel for Housing, Corporate Power, and Climate Justice at Americans for Financial Reform Education Fund. “We urge the FHLBank Presidents to heed Secretary Yellen’s call to double their contributions to the Affordable Housing Program.”

“Increasing Federal Home Loan Banks’ contribution to affordable housing programs from 10 to 20 percent is a no-brainer and the bare minimum of what it should be. The FHLBs receive billions of dollars in government subsidies, and must remain committed to their mission of supporting fair and affordable housing, instead of corporate profits,” said Eden Forsythe, Chief Policy Counsel at the National Community Reinvestment Coalition.

Bruce Dorpalen, Executive Director at the National Housing Resource Center said, “Let’s bring the Federal Home Loan Banks back to their core mission — helping house America.  The Coalition for Federal Home Loan Bank Reform is making practical proposals to help solve our ongoing housing affordability crisis, in direct alignment with the original purpose for creating the FHLBs. Housing Counselors across the country are seeing how difficult it is for first-time-homebuyers to find a house they can afford. The FHLBs need to get back to their original purpose and be on the front lines of affordable housing work.”

For further information or media inquiries, please contact Katie McCann at kmccann@consumerfed.org.

About the Coalition for Federal Home Loan Bank Reform:

The Coalition for Federal Home Loan Bank Reform is a non-partisan coalition of 14 national organizations dedicated to shaping reforms aimed at enhancing the ability of the FHLB system to address the nation’s unmet affordable housing and community development needs.